Audit 35894

Accounting Policies: 1.For all Federal programs, the District uses the fund types specified in Texas Education Agencys (TEA) Financial Accountability System Resource Guide (Resource Guide). Special revenue funds are used to account for resources restricted to, or designated for, specific purposes by a grantor. Federal and state financial assistance generally is accounted for in a Special Revenue Fund.2.The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The Governmental Fund types are accounted for using a current financial resources measurement focus. All federal grant funds are accounted for in a Special Revenue Fund which is a Governmental Fund type. With this measurement focus, only current assets and current liabilities and the fund balance are included on the Balance Sheet Governmental Funds. Operating statements of these funds present increases and decreases in net current assets.The modified accrual basis of accounting is used for the Governmental Fund types. This basis of accounting recognizes revenues in the accounting period in which they become susceptible to accrual, i.e., both measurable and available, and expenditures in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on General Long-Term Debt, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Federal grant funds are considered to be earned to the extent of expenditures are made under the provisions of the grant and, accordingly, when such funds are received, they are recorded as deferred revenues until earned. 3.According to the Resource Guide, funds received from the School Health and Related Services (SHARS) program represent reimbursements to the District for school health based services which are not already provided to special education students enrolled in the Medicaid Program, and, consequently, these revenues in the amount of $802,327 are not to be considered federal financial assistance for inclusion in the Schedule of Expenditures of Federal Awards (SEFA). These revenues are reported on the Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds in the General Fund column in the amount of $229,090 and in the Nonmajor Funds column in the amount of $573,237. Of the amount reported in the Nonmajor Fund column, the entire $573,237 is reported in fund 379.4.Borger ISD is the fiscal agent for funds received under various Shared Service Arrangements (SSAs). The federal funds received under the SSAs involve the IDEA Part B, Formula and IDEA Part B, Preschool grants. In accordance with the accounting requirements under TEAs Resource Guide, the District accounts for these grant funds in fund numbers 313 and 314, respectively. The total funds received for all member districts of the SSAs are shown as federal revenue and expenditures in these funds. In addition, in accordance with TEAs Resource Guide, the District also accounts for its proportionate share of these grant funds in fund numbers 224 and 225 respectively. For purposes of the determination of Single Audit requirements under Office of Management and Budgets Uniform Guidance, the amounts reported in funds 224 and 225 in the amounts of $567,557 and $15,712 respectively, along with the SHARS revenues discussed in Note 3 above are excluded from the calculation. If amounts accounted for in funds 224 and 225 were included in the calculation of federal expenditures for purposes of the Uniform Guidance, they would be counted twice. The amounts reported in funds 224 and 225 are also excluded from being reported on the SEFA.5.The District has elected not to use the 10% de-minimus indirect cost rate. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.